From Policy to Practice: How Indonesia's NEK Framework and Social Forestry Charter Are Building the World's Most Credible Community Carbon Pipeline

Two landmark regulations. Two different ministries. Two distinct entry points into Indonesia's climate architecture. When read together, and now, for the first time in 2025–2026, operationalized together, Presidential Regulation No. 110 of 2025 (Perpres No. 110/2025)  and Minister of Environment and Forestry Regulation No. 9 of 2021 (Permen LHK No. 9/2021) form something unprecedented: a legally complete, end-to-end pipeline that connects forest-dependent communities in Indonesia's most biodiverse landscapes directly to global carbon markets. In July 2026, Indonesia operationalized its Carbon Unit Registry (SRUK) and issued its first wave of forestry carbon project approvals, including the first officially approved Social Forestry carbon project in the country's history.

For most of the decade following Indonesia's ratification of the Paris Agreement, two regulatory problems ran in parallel. The carbon market had no functional legal plumbing: Perpres 98/2021 introduced NEK instruments but created a de facto freeze on cross-border transactions through unclear authorization rules, single-registry limitations, and a pre-NDC trading constraint that stalled voluntary carbon exports. Meanwhile, communities had the land but lacked the legal pathway to monetize carbon: Permen LHK 9/2021 granted social forestry holders explicit rights to carbon sequestration as an environmental service, but without a functioning national carbon market infrastructure, those rights existed on paper without a commercial pathway. Perpres 110/2025 solves the first problem. Permen LHK 9/2021 solves the second. Minister of Forestry Regulation No. 6 of 2026 (Permenhut No. 6/ 2026), enacted on April 6, 2026, stitches them together by explicitly recognizing holders of social forestry approvals and customary forest rights as legitimate carbon project proponents on equal legal standing with commercial concession holders.

The integrated regulatory pipeline works as follows. A community secures a Persetujuan Pengelolaan Perhutanan Sosial under Permen LHK 9/2021, a 35-year management approval granting rights over a defined forest area, mandating a 10-Year Management Plan, and establishing a KUPS authorized to engage in carbon activities. With tenure secured, a Project Design Document (Dokumen Rancangan Aksi Mitigasi / DRUM) is developed with a certified facilitator, defining the project boundary, baseline scenario, MRV methodology, FPIC documentation, benefit-sharing structure, and permanence buffers. An accredited Validation and Verification Body (VVB) independently audits and verifies the project. Verified reductions are then issued as SPE-GRK certificates in SRUK with unique serial numbers and buffer pool deductions, simultaneously reported to SRN-PPI for NDC accounting. Finally, the community's KUPS accesses three market pathways: domestic compliance buyers via IDXCarbon, international voluntary corporate buyers under Article 68(2) of Perpres 110/2025 without authorization requirements, and results-based payments via BPDLH from bilateral climate partners.

A critical enabler is project aggregation. Individual social forestry permits often cover areas too small to justify standalone carbon project development costs. The 2025/2026 framework formalizes the bundling of multiple contiguous social forestry permits into a single integrated carbon project under one DRAM and one VVB, distributing fixed costs across a larger credit volume and improving per-credit economics substantially. Forest Management Units (KPH) are positioned as natural aggregation anchors. The integrity architecture underpinning this pipeline rests on three non-negotiable pillars: mandatory FPIC documentation linked to SRUK registration, legally binding benefit-sharing agreements directing the majority of net revenues to communities, and biodiversity safeguard documentation through SIS-REDD+ along with permanence buffer allocations in SRUK.

When SRUK went live and Indonesia registered its first Social Forestry carbon project, it was proof that a decade of regulatory effort and community mobilization had crystallized into something real. Projects previously operating under Plan Vivo or Gold Standard in grey zones now have a defined domestic pathway that reinforces their international certification. Indonesia's dual-regulation framework demonstrates that high-integrity community carbon is achievable at national scale, when tenure is legislated, carbon rights are inscribed in law, market access is decoupled from intergovernmental preconditions, and FPIC and benefit-sharing are legal requirements rather than best practices. The forests are there, the communities are ready, and the legal framework is operational. The next chapter is not about regulation. It is about delivery.

Developing a landscape-scale social forestry carbon project in Indonesia? Connect with accredited carbon facilitators, VVBs, and community partner networks to navigate the Permenhut 6/2026 and Perpres 110/2025 compliance pathway from DRAM to SRUK issuance.